Funding for lending schemes should prioritize SME lending

Barnabás Székely ()
Additional contact information
Barnabás Székely: Magyar Nemzeti Bank (Central Bank of Hungary)

No 2020/138, MNB Occasional Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: In the aftermath of the sovereign debt crisis the Central Bank of Hungary implemented a great-scale funding for lending scheme designed specifically to subsidize SME finance. This creates a unique opportunity to identify this policy in the SVAR framework as asymmetric credit supply shocks specific to SME lending. I find that during the post-crisis recovery, such disturbances had a substantial effect on lending conditions and the real economy. Moreover, rather than supplanting lending to large enterprises, the program had considerable positive spillover effects to this sector. Finally, for a unit of lending, these shocks had larger and more persistent effect on output than general credit supply shocks. These results are robust to different proxies of economic performance and alternative identification strategies. I conclude that under tight lending conditions funding for lending schemes are more effective if concentrated to SMEs.

Keywords: Bayesian SVARs; Credit supply shocks; Funding for lending scheme; SME finance (search for similar items in EconPapers)
JEL-codes: C11 E32 E44 E58 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2020
New Economics Papers: this item is included in nep-cfn, nep-fdg and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mnb.hu/letoltes/mnb-op-138-final-1.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mnb:opaper:2020/138

Access Statistics for this paper

More papers in MNB Occasional Papers from Magyar Nemzeti Bank (Central Bank of Hungary) Contact information at EDIRC.
Bibliographic data for series maintained by Lorant Kaszab ( this e-mail address is bad, please contact ).